India Payments Market Size (2024 - 2029)

India Payments Market Anlaysis

The India Payments Market size is estimated at USD 357.51 billion in 2024, and is expected to reach USD 814.43 billion by 2029, growing at a CAGR of 17.90% during the forecast period (2024-2029).

• Shopping for goods and services on the internet, supported by an increasing number of online shoppers in India, is among the primary drivers for the payments market in the country, with payments made online through both UPI transactions and payment cards. The convenience of digital wallets and the emphasis on cashless transactions further fuel the adoption of online payments using cards and digital wallets, supporting market growth.
• However, the expansion of digital payments extends beyond applications integrated with the UPI ecosystem. Payment cards, particularly credit cards, have demonstrated a robust increase in both user adoption and transaction volumes in India. According to the Reserve Bank of India (RBI), ATM withdrawal transactions reached over 826.49 thousand in March 2023, up from 679.82 thousand in March 2022. Furthermore, credit card transactions at point-of-sale terminals rose to 140 million in March 2023, compared to 113 million in March 2022 made via credit cards. This data underscores a significant rise in cash withdrawals via ATMs over the past year.
• The payments market has seen a surge in diverse stakeholders, including wallets, payment service providers (PSPs), FinTechs, and BigTechs, all competing to establish their digital payment platforms. While these new players may not offer the full suite of services traditional banks do, they excel in catering to specific niches, delivering enhanced customer experiences, often at more competitive rates. Furthermore, these entrants face less stringent regulations than banks, translating into significant cost advantages. To attract and retain customers, FinTechs, wallets, and BigTechs often leverage rewards and cashback approaches. This customer-centric approach has not only driven down pricing but also intensified competition in the market.
• Government regulatory support, continuous technical advancements by the National Payments Corporation of India (NPCI), and innovative solutions from an expanding network of payment service providers have significantly increased public interest. There was an increased demand for contactless payments during the COVID-19 pandemic, and the trend continued even as the pandemic receded, indicating a long-standing shift in consumer behavior.
• The pandemic raised the demand for online purchases and cashless transactions due to the closure of physical shops. It transformed consumer buying behavior to go for payment options through digital wallets, which has been supported by the growth of mobile wallets and internet services in all the regions of the country, creating a market growth opportunity for the payment market during the pandemic and post-pandemic period in India.

India Payments Industry Segmentation

Payments entail the transfer of money from one party to another in exchange for goods, services, or the fulfillment of a legal obligation. This transfer can occur through various methods, including credit and debit cards, digital wallets, bank transfers, and virtual currencies.

The Indian payments market is segmented by mode of payment (point-of-sale [card payments, digital wallet, cash, and others] and online sale [card payments, digital wallet, and others]) and end-user industry (retail, entertainment, healthcare, hospitality, and other end-user industries). The market sizes and forecasts are provided in terms of value (USD) for all the above segments.